A recent survey has revealed strong public support among Australian private health insurance holders for reforms to private hospital funding. Conducted by Money.com.au, the survey found that nearly 80% of respondents favour changes aimed at reducing out-of-pocket costs for patients, signalling widespread interest in transforming the healthcare financing system.
Currently, the funding system combines insurance company agreements, patient contributions, and Medicare benefits. Only 20% of respondents expressed satisfaction with the status quo, indicating a clear appetite for a predefined, financially less burdensome system.
Support by Funding Model
The survey also examined preferences according to the type of proposed reform. Respondents indicated varying levels of support depending on the funding model:
| Funding Model | Respondent Support (%) |
|---|---|
| Any model reducing patient costs | 53 |
| Federal Government’s Activity-Based Funding (ABF) proposal | 27 |
| Maintaining current insurance–Medicare–patient fee mix | 20 |
The ABF model proposes setting standardised prices for specific types of private hospital treatments, replacing the current variable fee structure, with the goal of ensuring both quality and affordability.
Generational Differences
Support for reforms varies across generations:
| Generation | Preference |
|---|---|
| Baby Boomers | Strongest reform supporters; 64% favour any model reducing fees |
| Generation X | Most supportive of Federal ABF proposal; 27% endorse the plan |
| Millennials & Gen Z | Lean towards maintaining current system; 34% of Millennials, 46% of Gen Z prefer status quo |
This generational divide highlights differing perceptions of healthcare costs and financial risk.
Government Proposals and Industry Concerns
The Federal Government’s draft reform includes the introduction of a Private National Efficient Price (PNEP), establishing national standards for private hospital pricing and insurer agreements. While consultation is ongoing, reforms could take effect from July 2026.
Industry experts caution that any changes must balance patient financial protection with hospital operational viability. Chris Whitelaw, General Manager of Health Insurance at Money.com.au, warned that “without adequate safeguards, hospitals may increase fees, transferring costs to patients.”
Rising pressures on private health insurance premiums are also expected. Industry forecasts suggest an approximate 4% increase in premiums over the coming year.
The survey underscores strong public appetite for reform, but successful implementation will require a careful, measured approach that safeguards patients while maintaining the financial sustainability of private hospitals.